BCE Inc. (TSX:BCE)(NYSE:BCE) reported second-quarter adjusted earnings per share of C$0.87 ($0.68) in 2022, up from C$0.83 in the same period in the previous year. The Zacks Consensus Estimate was $0.65.
The total operating revenues for the quarter increased by 2.9% to C$5,861 million ($4,593 million). The consensus estimate was $4,530 million. Service sales increased by 3.8% to C$5,233 million, indicating strong wireless, residential Internet, and media growth. Due to fewer commercial wireline data equipment sales and mobile device transactions, product revenues fell by 4.6% to C$628 million.
The company’s operating momentum was supported by large expenditures on broadband, a 5G network acceleration initiative, and mobile phone augmented ARPU growth.
Results By Segment
Strong service revenue growth and stronger year-over-year revenues from international roaming were the main drivers of Bell Wireless’ operational revenues, which rose 5.5% annually to C$2,246 million. Lower product revenues year over year partially offset this. To $543 million, product revenues decreased by 0.9%.
The increase in mobile phone and connected device subscriber bases, as well as greater blended average mobile phone revenue per user due to loosening covid limits and increased international roaming revenue, drove a 7.8% increase in service revenues to C$1,703 million.
Due to extended phone lifecycles and a high mix of customer activations for pre-owned devices, there has been a decrease in the volume of sales transactions. Compared to the second quarter of 2021, Bell Wireless added 110,761 post-paid and prepaid mobile phone subscribers.
Bell Wireline’s earnings fell by 0.3% to C$2,995. Revenues from wireline services rose 0.6 percent to C$2,909 million. The increase was primarily brought on by higher residential Internet revenues, which were partially offset by ongoing declines in legacy voice, data, and satellite TV services, lower sales of IP connectivity, and lower sales of business service solutions. Large enterprise customers also played a role in the increase by delaying project spending because of COVID-related disruptions and the sale of Createch on March 1, 2022.
Due primarily to lower sales of data equipment to corporate business customers resulting from deferred investment due to supply-chain delays brought on by the pandemic, product revenues decreased 23.2% to C$86 million.
Bell Media reported revenues of C$821 million, an increase of 8.7% from the previous year. Higher subscription income and greater TV advertiser spending were the main drivers of the growth.
In the reported quarter, adjusted EBITDA increased by 4.6% year-over-year to C$2,590 million. Wireless segment growth of 8.3%, wireline segment growth of 1.7%, and media segment growth of 5.6% contributed to the gain. The adjusted EBITDA margin was 44.2% instead of 43.5% compared to the same quarter last year.
Cash from operating activities at BCE came to $2,597 million, up from $2,499 million in the same quarter last year. Higher cash flows from operating activities increased free cash flow from C$1,245 million to C$1,333 million.
BCE Outlook for 2022
BCE released its 2022 financial forecast. It anticipates adjusted EBITDA growth of between 2 and 5% and sales growth of between 1 and 5%. The expected increase in adjusted earnings per share is 2 to 7%. Free cash flow growth is anticipated to be between 2 and 10%. The expected annualized common dividend per share is C$3.68.
A quarterly dividend of $0.92 per share, payable on October 15, 2022, to shareholders of record on September 15, 2022, has been declared by BCE.
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